The Silent Energy Revolution
It is essential to read the paper (6.9.2013) drafted by the Foundation for Social Studies and Analysis (FAES), linked to the Popular Party (PP), entitled “Implicaciones geopolíticas de la independencia energética de los Estados Unidos” (Geopolitical implications of United States’ energy independence). This paper, signed by three experts: Pedro Mielgo, President of Nereo GreenCapital, Florentino Portero, Professor of Contemporary History in the UNED and Gerardo del Caz Esteso, industrial engineer and expert in energy policies, highlights the great novelty, almost immediate, in the new geostrategic balance: the U.S., the big global power along with China, will leave its energy dependence behind by 2020 as well as the related economic and political costs.
United States is the second biggest energy consumer in the world (8% GDP), meaning each inhabitant spent USD 4,000 in 2010. At the end of the last decade, the U.S. imported around 60% of its domestic consumption. From 2025 onwards, the country will be able to export more fossil fuel that it imports and will also become an exporter of gas. According to the authors of this study, there is not only a strong political willingness behind this sort of silent revolution but also a technological one: the hydraulic fracturing (fracking), which consists on injecting chemicals diluted in water at extremely high pressure so as to break the rocks that contain abundant reserves of Shell gas and, eventually, oil. The American authorities and the country’s society itself are aware of the environmental costs linked to this extractive technology and yet they accept them in order to gain energy self-sufficiency. This will entail a self-provision that will change international politics, especially in traditional conflict areas as for instance the Middle East, which is the scene of major and localized conflicts since last century where the energy factor has been an extremely determining variable. The US is already reducing significantly its consumption of fuel imported from that region.
The United States’ energy self-sufficiency is expected to arrive in 2020 and it will imply a radical economic and geopolitical change that will affect Europe
As a result, China will become the main consumer and energy importer and Europe will depend (excluding the possibility of self-sufficiency) on the United States much more than it currently does. This will also favor a reduction of its dependence from the Middle East to an extent which the true revolution, according to the authors of the aforementioned paper, “will take place in the western hemisphere with the American self-sufficiency and the resultant diversification of production sources in Europe”. Thus, the United States will have a new engine for economic growth, albeit not without difficulty, which will trigger a change in the global scenario: it will be the first gas producer in the world as well as one of the main oil producers and it will have more economic resources than other countries for the international markets. They also note that “it will have the most advanced and innovative extractive industry, especially in the field of hydrocarbons, with competitive companies and nearly exclusive technologies”. Furthermore, the Americans still have rich coal reserves and they promote the use of nuclear and renewable energy.
600,000 jobs were created and USD 76,000 were added to GDP thanks to the fracking extraction method, so Europeans cannot ignore this new reality
Darío Valcárcel, a prestigious Spanish analyst in international issues (ABC, 12.9.2013) has described this situation as a “transforming moment”, whereas another analyst –a financial analyst in this case–, Daniel Lacalle (El Confidencial.com) stated in his famous article “Fracking sí, por favor” (Fracking yes, please) that banning this extraction method would be a “suicide” since Europe would save no less than 900 billion thanks to its implementation which would help to achieve its objective of reducing imports and CO2 emissions. Moreover, something similar to what happened in the U.S. would occur: 600,000 jobs were created and USD 76,000 were added to GDP. Lacalle apparently stated that “in Spain, we have important reserves of shale gas concentrated in the regions most affected by unemployment (nearly 30%)” and he logically concludes that “the cost of energy is everything”. One of the cruxes of the question might be the explanation given, among others, by the financial expert Marc Garrigasait (El Confidencial.com, 4.12.2013): “We, Europeans, are much more conservative than Americans and, when it comes to fracking, should there be any doubt regarding eventual environmental risks, a European citizen would rather not start the process. That is the opposite of what would happen in the United States, where a cost-effective project is hardly ever rejected. If, in addition to being cost-effective for the private sector, the project is strategic for the country, they no longer doubt it”.
In Europe –which suffers from a serious energy disorientation in terms of the components of its mix, with high remunerations for renewable energy, which are prioritized in the access to the system and whose price, both domestic and industrial, has consequently risen– there are continuous hesitations concerning the research for new extraction methods such as fracking. The United Kingdom has offered 64% of its territory (a hundred licenses) to use this technology and look for gas (El País, 18.12.2013), whereas in Spain, the autonomous communities refuse to issue the extraction licenses. Yet energy prices “accelerate EU’s industrial decline”, as pedagogically explained for La Vanguardia Mariano Marzo, professor at the University of Barcelona on 17.11.2013, and he also explained how industrial cost in Europe is three times the cost in the U.S. and the electricity price in Europe doubles the price in the U.S.
The fact that Europe has made an expensive and problematic commitment to develop clean energies is leading companies and the government to what Miguel Ángel Noceda, business and financial analyst of El País, called “the fracking of contention” (8.9.2013) because these method’s environmental consequences are starting to mobilize large groups. In Spain, not only in Catalonia but also in Cantabria –region in which Shell gas is supposed to be abundant, as well as in Castile-Leon and the Basque Country, although no verifications have been made so far– there are many rejections of this method due to its environmental impact.
We undoubtedly face a great challenge with contradictory interests: energy production through fracking and the planet’s environmental sustainability. This is a challenge that Americans have met
Thus, this is the silent energy revolution –that has not been discussed yet in major public opinion debates– which will affect extraction systems in emerging countries with abundant fossil fuel resources and that will alter the geostrategic balance of the planet and, consequently, the global economic hegemony will be more dual (U.S. and China and, far behind, Russia). This will force Europe to reconsider its priorities and the way of achieving them, especially regarding its policy concerning renewable and nuclear energy as well as energy mixes of the Member States of the EU. We undoubtedly face a great challenge with contradictory interests: energy production and world’s environmental sustainability.